I would like someone to explain why we (Americans) have all our fiat money issued through private "Federal" reserve bankers when we could just simply have the treasury issue this money directly. Why do we pay trillions of dollars of interest to private bankers for issuing money under the guise of lending? This makes no sense. We could be saving our children trillions of dollars in false interest if we let the treasury issue it directly as JFK had them do before his demise, only to have the corrupt system to be reinstated. What do these private bankers do for us that's worth trillions of dollars?
Absolutely nothing. Apparently, Abraham lincoln produced a new idea of a monetary policy in 1865, senate document 23, page 91, 1865. This essentially said what you say and suggested that the government create money instead, to help clear up after the civil war. I got information about that, C H Douglas and lots of other related stuff from: "Teh grip of death" by Michael Rowbotham. ISBN number 1 897766 40 8
When the government wants money, it should come from the usual sources: taxes, sales of assets, or borrowing. If the Treasury simply printed new money without a debt attached, it would lose value at a higher rate than inflation. That is, inflation would increase. The more such money printed, the higher the inflation. All things considered it’s cheaper to pay the interest than to accept the extra inflation. So it’s not a corrupt system.
Who should the government borrow money from and what gives this borrowed money any value? If banks simply issue these loans as debt, where is the value? Why should we permit private banks to buy fiat money from the mint at a fraction of one percent of face value and loan it to the government at interest when we could get the treasury to do it for free? If it's not corrupt why do they fraudulently label private bank tokens as federal reserve notes? A note is something that has collateral. FRN's are not backed by anything thus calling them notes is fraud. http://www.fame.org/ http://www.bankfreedom.com/ http://iresist.com/cbg/mcfadden.html http://www.freedomdomain.com/bankquot.html
They should borrow money from whoever gives them the lowest interest rate. The borrowed money has value because it’s money. Money can be as simple as a computer entry that everyone upholds as having the stated value (that’s all your bank balance is). The loan has value because it's backed by a country having a great credit rating. Isn’t this a repeat of your last question? If not, please rephrase. If the Treasury is only the printer but the new money needs an obligation (loan) behind it, then the money must transfer to lenders who will then attach an obligation to it. The private banks might as well be the government, but since the government is less efficient at banking they outsource the lending service. There could be some collusion there. The fraction of one percent is the cost of the Treasury's service. The notes are backed by the weight and word of the US government. Not all loans need collateral. Uncollateralized loans are called unsecured loans. If the US calls it a “note” despite being uncollateralized, then a note may be uncollateralized (that is, the US defines the word). I wouldn’t get hung up on semantics. Whether a loan is collateralized or unsecured, it still carries risk. US loans are widely considered to be the lowest-risk. In fact the rate the US government pays for Treasury bills is globally called the risk-free rate. Not only has the US paid back its loans for some 200 years, it also has the world’s most powerful military with which to both protect its ability to pay back the loans and also increase its ability to pay back the loans (as with the takeover of Iraqi oil).
Anyone, do you have stats on how much the US is owed in terms of loans? Or even better who owes what to who internationally?
Not to hand. But those of you who are interested in this issue might also start with : http://www.goldismoney.info/forums/forumdisplay.php?f=7 A little pigeonholed and theres a few rants in there, but much of it is correct. A better way of phrasing the quesiton is why do we need private banks to issue the money at all? And is everyone aware of how the only way to get money into an economy is to borrow it? (or else print loads of money, but that is les common these days, since everyone sees how stupid it is.) Ultimately, using borrowing to create money is an evil blot on the face of the world. It leads to all sorts of hideous side effects, and ultimately means the world is owned by the banks.
You’re presenting only one side of it. The borrowed money was used to buy things. Americans put themselves in hock voluntarily. Borrowing can be good if the interest rate is low and debt levels are kept in check (they aren't now). The US is not owned by banks but ultimately by the people who gave the banks money that the banks then loaned to the US. If the government issued the money rather than private banks, then the government would be a bank and probably not a very efficient one. Many banks offer some competition that keeps costs lower. Remember the banks don’t keep all of the 2% interest or whatever. They keep only the spread between what they pay their depositors (the people who ultimately own the US) and what they get paid by the US. They are simply a middleman.
Hey let the good times roll! Lovely, the debt situation in the US is worse then ever before, I did stats on it before: last time I checked the American consumer debt was at about $2 trillion, add that the $7 trillion of the US government you have about 78% of the US GDP. The US economy is dependant on debt. This will only bit the US in the long term where debt becomes such a large burden the consumerist society could collapse, alas the Great Depression all over again. If you were to add mortgages you have another $7 trillion worth of debt, so altogether debt consists of 140% of the US GDP. The same problem precipitated the Great Depression a mere 75 years ago. http://www.washingtonpost.com/wp-dy...-2004Jan12.html http://www.sciforums.com/showthread.php?t=32680
If the government gave me the right to create money out of thin air I'd be glad to loan it to the government at 1% or any rate. But why should the government pay interest on money that they could get from the treasury for free and avoid paying gazillions in interest to private banks? You're not serious are you?
Errrmm, I am indeed presenting one side, but the rest of it isnt qutie right. You see, the bank dont lend money that you gave them. The banks lend vastly more money than they have in stock, or on deposit. Thats the point. There is no balance to the system. The bank lends 1,000 a milion bucks each, and puts in their books, that each person has - 1,000,000. Then when it is paid back, the banks have 1,000,000,000. (plus interest.) However, they never necessarily had that billion dollars to begin with. Thats the point I'm trying to make, is that there is a total decoupling between the money in circulation and what it is actually based upon, the banks get to create the money as they wish. How much money are banks required to have on deposit when they lend? I think its only a few percent of what they lend. The res tof it is imaginary, on the money go round. The only reason it keeps working is if, indeed, people keep borrowing and putting more money in circulation. What happens when people borrow less. Where does efficiency come into the simple act of creating money? There are sensible ideas about how the gvt can create debt free money, its just nobody looks at them. I'l have to nip away and read up on them again. The banks are not simply middlemen, like I said, they create the money. ASk yourself why the national debt gets bigger. ASk yourself what the inflation is. Its an increase in the money supply, feeding through to prices. Then think of it operating in an economy where prices are falling due to technological advances and exploitation of cheap labour. In this country, the UK, all the money is feeding into the housing market, pushing prices so ridiculously high its unbelievable.
You’re missing or ignoring the key points in my replies above. The government doesn’t give the banks money. The banks buy the nearly worthless paper from the Treasury, then they attach an obligation to the paper to give it value (that is, they find a lender). Then they give the proceeds from the attachment (less a spread, their profit for providing a service) to the government, who spends it. I repeat: the paper the Treasury prints is initially virtually worthless (worth only the paper). If the government spent that paper (it isn't money yet) before it passed through the lenders’ hands, extra inflation would result. The extra inflation would effectively cost more than paying the interest on the loans. The interest the government pays goes to whoever lent the money, not necessarily the bank. It could be your grandma or a Japanese corporation. Anyone can lend money to the US government. The bank is just the middleman, enabling the transaction. You don’t get something for nothing. Does it really make sense to you that a government could just print money and spend it? Oh, wouldn’t life be easy then. Nobody would have to work or pay taxes. The government could just print money and give it away to everyone! Hooray! What do you think?
No, they can’t lend more money than they have on deposit. I think you’re confusing this with the percent of deposits the bank must not lend out. Banks are required to have some percentage of deposits on hand for potential withdrawals. Simply because the government is spending more than it takes in. Inflation is related to supply and demand. One of the obvious factors is that population is increasing while resources are decreasing. That’s why you can expect house values to increase exponentially.
Well, I'd love to have the government give me that worthless paper and let me issue it to the government as a loan and then pay me interest on it. Hooray!!
As I’ve said many times in many ways now, it doesn't work like that. Clearly you get more enjoyment from ignorance than knowledge.
Do you specifically disagree with anything on this page?: http://www.geocities.com/northstarzone/FED.html
Are you really, really sure about that? I would assume that what you are talking about is the liquidity ratio. This used to be along the lines of the banks being required to have 10% of money on hand, in cash, for withdrawals, and they then could only lend up to 90% of the value of the deposits they had. However, that is not now the case. Apparently it was abandoned in 1981 in order to open up international banking. But what has happened to every country that has reined in the national debt? Simple- theyve gone into hideous depressions. Without the extra debt laden money in circulation, the countries economy cant cope. the government acts as the brorower of last resort, and by doing so lubricates the economy with money. Now, it is possible to pay off debt by using up natural resources at a high rate, but ultimately it doesnt leave the country much better off.
Some interesting sites on the "Fed". http://www.geocities.com/northstarzone/FED.html http://the7thfire.com/Politics and History/Federal-Reserve.html http://www.freedomdomain.com/bankquot.html "I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs."--Thomas Jefferson, U.S. President.
